Rethinking tipping culture

[PSmith]

Now it is no secret that us Brits don't have the same generous culture as Americans when it comes to tipping.

But one thing that seems to be creeping into UK restaurants is service charge. More so now we have minimum wage. Bar staff, food servers and kitchen staff are now on the same hourly rate as a junior administrator in an office.

Many don't realise that the service charge often goes to the establishment and not the staff and is therefore not a tip.

http://www.timeout.c...not_to_tip.html

Personally I am not sure that this is a good thing.

ETA - restaurants were allowed to use tips to make up minimum wage, but this loophole has been closed

http://www.guardian.co.uk/money/2009/jun/07/waiters-tips-restaurants-minimum-wage

Edited January 9, 2013 by PSmith (log)

[PSmith]

Tipping!! I'm dreading it. We're coming to the states next month for three weeks & will be eating in restaurants quite a bit. HAVING to tip just drives me nuts.

In the UK we seem to be moving more towards the American culture of tipping. Like you, I hate it. If I see a price on the menu, that is the price I want to pay, not the price plus taxes, service charge and then tip. What was an average priced meal quickly becomes expensive. If the service and food has been good, then I will tip and I would expect the tips to be shared with the kitchen staff.

Since the introduction of minimum wage, we are also seeing a lot more establishments in the UK adopting a service charge, which a lot of people mistakenly think goes to the staff and therefore don't tip.

http://www.guardian.co.uk/money/2009/jun/07/waiters-tips-restaurants-minimum-wage

Personally, now we have minimum wage in the UK which applies to all trades, then I don't see why certain industries should have the culture of tipping, unless expectations have been exceeded.

[sigma]

Tipping is neither particularly illogical nor economically inefficient. You are allowed to assess the product before you price it, which is a great benefit to the consumer. The cultural aspects and pressures are more problematic.

[Allura]

A question for the non-Americans: are restaurant prices higher (accounting for differences in currency) or equivalent to the prices in the US? In other words, does paying a regular increase the actual price of the meal? And does this affect how often people dine in a restaurant?

[PSmith]

A question for the non-Americans: are restaurant prices higher (accounting for differences in currency) or equivalent to the prices in the US? In other words, does paying a regular increase the actual price of the meal? And does this affect how often people dine in a restaurant?

It is difficult to say. I can get a nice meal locally - 3 courses with wine and coffee, in a Michelin recommended restaurant for £50 a head including wine and tip - that is about $80. In London I would say you could easily pay twice that for a nice meal in a Michelin starred restaurant. Two main courses and desserts in a nice pub/inn will cost about £30-£40 with a couple of beers each.

We were in the US in 2011 and found eating out very expensive compared to the UK - but that might just be the exchange rate.

We have cut back considerably on the number of times we eat out. We tend to just eat out somewhere really nice on a special occasion rather than the "can't be bothered to cook tonight - shall we go out" meal, but that might just be the recession.

Edited January 9, 2013 by PSmith (log)

[jrshaul]

Here's the fundamental issues with tipping, as I see them. Please note that the prices are all in 2013 "real" dollars. And by "Real", I mean "Not reflecting that the low end of food and housing is much more expensive than it was ten years ago."

1. For many years, 15-20% was fairly standard. Combined with a more reasonable cost of living, a waiter could live very comfortably on $2.73 an hour in today's dollars. My father was a waiter for many years; he described is actual paycheck as being largely inconsequential compared to gratuities.

The shrinking economy has created two opposing pressures: The cost of living is higher for both customer and waiter. Tipping is reduced, and waiters cannot live as well on what would previously have been an abundant salary.

2. Waitstaffing is often reduced in quantity. According to my father, a restaurant in Ohio with $40+ entrees might have a sommelier and many entrees flambeed tableside. 20% on a $200 table was justified by the increased staff and risk of waiter's potential immolation.

Today, you just get a waiter. If you want something cooked in a chafing dish, they beat you over the head with the bill. (Of which the waiter actually doesn't see any.)

3. The disproportionate spending of "whale" tables often leads waiters to favor them very heavily. If the guys next door order two rounds of beer between my seating and receipt of tap water, you're getting a short tip. Of course, I'm only augmenting the problem, but I don't actually care.

4. Waiters used to be tipped in cash. Now they get a percentage of debit. This is 100% taxed income.

A friend of mine works ~40 hours a week at a nice sit-down restaurant in rural Wisconsin. After taxes, she sometimes only takes home $800 a month in the slow season. She can either get her ulcer checked out, or she can pay rent.

The tipping system works very well as intended: A 15-20% baseline gratuity provides adequate compensation to ensure quality labor, and is proportional to the effort - either in quantity, or quality - provided. It also reduces the overhead for the owner in the event of a slow night. However, when the majority of tables offer meaningless compensation, the quality of labor reduces (you can make more tip-free at Subway) and it becomes advantageous to favor the profitable minority.

Edited January 9, 2013 by jrshaul (log)

[Edward J]

Tipping is neither particularly illogical nor economically inefficient.

Now here I must disagree, tipping is illogical.

If we take the example the speaker in the video, Mr Mc Adam gave, of table "A" having a bill of $200 and "B" of having a bill of $300 each with the same amount and quality of service (same server) "A" will tip 20-$30, and "B" will tip 30-$45. Yet both tables had the same service.

I find this illogical, but there's more.

Usually you can get just as much information about what people are NOT saying, as what they ARE saying.

In each post I made on this thread I made the statement that the server is tipped a percentage of the entire bill but is not responsible for the entire dining experience. I am doing so again.

Yet no one one acknowledges this, and no one will argue against it.

Anyone?...., jrshaul?.....

I also beg to differ with Annabelle's comment in her first post about people not being forced to accept such employment if they find the compensation distasteful.

Pardon my language, but this is Boule-cheet.

How?

Most cooks take some form of culinary schooling, and most employers are looking for this. Fair enough. This can cost anywhere from $10,000 to $60,000, all depending on the school and the curriculum. When the graduates leave school and look for work, the average pay rate is +/- $10-$14

per hour--and no guarantees that you will get 40 hrs/week either, plus you have to factor in the cost of gear, uniforms, etc. How does a graduate expect to pay back a student loan with this kind of income? If the graduate wants to stay in the industry s/he trained for, s/he/ is pretty much forced to take the low paying jobs--there are no huge pay differences between Restaurant "A" and Restaurant "B". Of course the culinary graduate can seek employment in other sectors and pay off his loans and start to earn a living with a higher salary, but this defeats the whole purpose of getting a culinary education.

Comments?

[sigma]

Tipping is neither particularly illogical nor economically inefficient.

Now here I must disagree, tipping is illogical.

If we take the example the speaker in the video, Mr Mc Adam gave, of table "A" having a bill of $200 and "B" of having a bill of $300 each with the same amount and quality of service (same server) "A" will tip 20-$30, and "B" will tip 30-$45. Yet both tables had the same service.

I find this illogical, but there's more.

Usually you can get just as much information about what people are NOT saying, as what they ARE saying.

In each post I made on this thread I made the statement that the server is tipped a percentage of the entire bill but is not responsible for the entire dining experience. I am doing so again.

Yet no one one acknowledges this, and no one will argue against it.

Anyone?...., jrshaul?.....

Nobody argues against it because it is insignificant. Yes, the server is not responsible for the whole meal, but then they are not being paid for the whole meal, even you acknowledge that. The fact that their pay is a percentage of the whole dining experience cost is not problematic in any way. They are there to be the go between between the restaurant as a whole and the customer. The percentage construct is sensible.

I also beg to differ with Annabelle's comment in her first post about people not being forced to accept such employment if they find the compensation distasteful.

Pardon my language, but this is Boule-cheet.

How?

Most cooks take some form of culinary schooling, and most employers are looking for this. Fair enough. This can cost anywhere from $10,000 to $60,000, all depending on the school and the curriculum. When the graduates leave school and look for work, the average pay rate is +/- $10-$14

per hour--and no guarantees that you will get 40 hrs/week either, plus you have to factor in the cost of gear, uniforms, etc. How does a graduate expect to pay back a student loan with this kind of income? If the graduate wants to stay in the industry s/he trained for, s/he/ is pretty much forced to take the low paying jobs--there are no huge pay differences between Restaurant "A" and Restaurant "B". Of course the culinary graduate can seek employment in other sectors and pay off his loans and start to earn a living with a higher salary, but this defeats the whole purpose of getting a culinary education.

Comments?

OK, so here you are, as dear old dad used to say, putting the emphasis on the wrong syllable. If the going rate for a cook is 11-14 and hour, then what isn't logical is going to cooking school. But this is no surprise. The industry grew up around an apprenticeship system, and professional schools in general are a pretty big scam. Add to that the need to retrain newly minted cooking grads at all but the lowliest of establishments and you realize that the culinary education is not defeated but self defeating.

[annabelle]

It's a matter of choice, EdwardJ. We are not living in Medieval times when one was destined by birth to work in a particular trade.

And, I see that sigma beat me to the punch.

Edited January 10, 2013 by annabelle (log)

[haresfur]

A question for the non-Americans: are restaurant prices higher (accounting for differences in currency) or equivalent to the prices in the US? In other words, does paying a regular increase the actual price of the meal? And does this affect how often people dine in a restaurant?

It's a bit tricky to do the comparison. I believe that, here in Australia, restaurant prices are higher than in the US and particularly for low-moderately priced meals are higher even when you factor in a tip. But then prices for groceries and everything else are higher, too. So I'm not sure how much of the difference is due to wages and how much due to other factors. I have noticed that there seem to be better lunch prices in Melbourne than in my small regional city. Perhaps that's the competition or that they can make up fixed costs on volume.

I don't eat out as often, but I'm also earning less than when I had a job in the US.

[ChrisTaylor]

Prices seem to be a mixed bag. I mean, I've had ex-Americans tell me that the high end was more expensive than it is in Australia but the lower end is usually cheaper in the States. There's the odd exception to the rule, however. To be honest, having scouted out the prices for a few places myself I'd say that 'normal fine dining'--i.e. a really nice restaurant that isn't exceptionally expensive by local standards--is maybe on par. Maybe slightly dearer in some instances. Maybe slightly less. Certainly you pay a lot less for alcohol, be it in a restaurant or at a bottle shop. That said, a friend just returned from the States and found that most things were significantly cheaper than in Australia. So. Yeah. It varies. He was in the South, too, as opposed to New York or wherever else. Maybe the state-to-state variation in the States is more significant than the variation from, say, somewhere wealthy in the States to Sydney or Melbourne (I mean, Melbourne and Sydney are considerably dearer than Brisbane and Hobart).

Wages, however. Despite what haresfur says, it's my understanding that typically wages in Australia are higher than those in the US. I know that even as a fairly recently graduated primary teacher I earn significantly more than even a fairly experienced teacher in the US public system (altho' I understand that the salary varies considerably from state to state and city to city). As a teacher, even tho' I'm lower midddle class by Australian standards, I'm still able to go to Australian fine dining restaurants and not starve for the rest of the month. We also have a minimum wage here for, er, everyone. And legally employers have to abide by it. So if you're a waiter or a salesperson of some kind--i.e. the sort of job where you get tips or commission--you still have a living wage to fall back on. Every so often there's the odd move from the right to mess with the system but that's seemingly a one way road to political suicide. You also don't need to rely on your employer to provide health insurance or other benefits necessary to living a happy and healthy life. In addition to the universal health care and private insurance and whatnot, if you're on an especially low income there are benefits (i.e. discounted medication and treatment). At the same time, knowing a few people in the industry here, your income is basically fixed. Being a really great waiter in a really high end restaurant doesn't necessarily mean that you'll earn a whole lot more than someone who does just an okay job in a casual restaurant. Tipping isn't part of our culture, altho' it's steadily creeping in more and more. The attitude of most people I know is to maybe round up--i.e. if it's a $152 bill we'll put in $160--or maybe to throw in a little extra if the service is great. And even if you do tip, what seems to happen at most places is the tips are shared equally between front of house and the kitchen.

[pastrygirl]

Cooking and being a waiter are two completely different skill sets. Of course there is going to be income inequality.

Your "of course" confuses me. Why of course? How is the dollar value of a particular skill set determined? My baby brother and I have different careers but our salaries are the same - completely different skill sets, no income inequality. My salary is based on years of baking & pastry experience and the fact that my employer hopes to keep me forever in 'golden handcuffs' and is decent enough for my field, his is based on having gone to law school and is probably considered entry-level for his field. (Though once he has 15 years of experience his income will likely be a few times mine, mine hopefully will go up but realistically not much more than 25-50%). So what determines wages? Experience? Education? Specialized skills? Competition for skilled workers in a given market? Whatever the market will bear?

I don't think tipping culture is based on any of these, tipping is an obligation, not a true reflection of a server's skills. When we tip, we have no idea how much the other tables that night have tipped, so we don't know whether that server is making $15 an hour that night or $45. We are not tipping to say, "your service was deserving of $X an hour tonight". If you knew what your server was earning on a particular night and didn't feel obligated to a certain percentage, would tipping change? Would you say, "eh, the other tables must have liked her because she's up to $32 an hour, I don't think she's all that, I'm leaving a dollar"? Or, "I can't believe that last table didn't like her, she's way better than the $14 an hour she's at tonight, let's leave extra"?

Which skills are worth what? Which FOH skills are worth 2-4x BOH skills?

Edited January 10, 2013 by pastrygirl (log)

[Edward J]

name='sigma' timestamp='1357780145' post='1904761']

Nobody argues against it because it is insignificant. Yes, the server is not responsible for the whole meal, but then they are not being paid for the whole meal, even you acknowledge that. The fact that their pay is a percentage of the whole dining experience cost is not problematic in any way. They are there to be the go between between the restaurant as a whole and the customer. The percentage construct is sensible.

Uhh, now that's not making any sense. No.The sever is being tipped a percentage of the entire dining experience, from drinks to dessert, and may include taxes too. By doing so, the diner acknowledges that the server IS responsible for the entire dining experience, or they wouldn't tip based on a percentage the entire bill, but rather a flat fee (service charge) or some other calculation. Plus the fact that tips are not pay, they are not recorded on the pay roll and tips are voluntarily given to the tax office (no pay stubs for tips....)

OK, so here you are, as dear old dad used to say, putting the emphasis on the wrong syllable. If the going rate for a cook is 11-14 and hour, then what isn't logical is going to cooking school. But this is no surprise. The industry grew up around an apprenticeship system, and professional schools in general are a pretty big scam. Add to that the need to retrain newly minted cooking grads at all but the lowliest of establishments and you realize that the culinary education is not defeated but self defeating.

Whoa, hold on there! America never had an apprenticeship system, but more importantly there is no standard or benchmark for cooks in the U.S. "The industry" evolved around immigrants who couln't get hired into well paying jobs and instead opened up a restaurant, laundry, or other small business--and still does to this very day. But I digress, How can you have an apprenticeship and not have a standardized qualification????? True, each culinary school has thier own form of a standard, but each one is different from the other, as well as curriculae.

In spite of all this, the facts remain the same: Cooks are saddled with student loans, and are trying to pay them back with crap wages. Cooks get paid crap wages at the end of the month, and servers walk home with $100 or $200 in their pockets at the end of the night If you think the restaurant industry and the culinary school industry are not related--don't communicate with each other--- then you have some serious re-thinking to do.

[sigma]

Edward, you just keep saying the same thing over and over, but that doesn't make it any more true than it was when you started. You don't like how society values waiters and cooks differently, but that is just you having a different opinion than other people. The part about being saddled with loans is silly, though. Most cooks are not culinary school grads, and at least in my day, most culinary school degrees were scoffed at. There is a big problem with professional, for-profit schools and government guarantees of student loans. It puts a lot of people in a lot of schools they shouldn't be in, but again, that has nothing to do with tipping.

[Edward J]

O.k. then, we can agree that apprenticeships are not part of N.America's history.

Most cooks--at least the ones I've interviewed and worked with in the last 20 years have had some kind of culinary schooling. I scoff at at any culinary "degree". Cooking is a trade, and as far as I am concerned there are no degrees in culinary education--hospitality mngmt, yes, but cooking, no. I also wish to impress on you that without the hospitality industry there would be no Culinary schools--the two are very closely linked. I suggest you visit other food related sites and see for yourself how often the topic of school loans vs. salary for cooks comes up. It is a very common topic, and many employers are now asking for at least 1 year of some kind of culinary education. Perhaps you can ask a few local restauranteurs to verify this?

Of course I don't "like how society values waiters and cooks differently", neither did Mr. McAdams- the speaker on the video that was featured in the first post of this thread. But hey, he's only a restauranteur in business for 25 years, and who speaks of collegues who share his opinion and are doing something about it in their restaurants. And of course there are a few people on this thread who, by reading their posts, share the same opinion.

I guess that's the whole essence of the thread, eh?

What do I know? I am a "lifer" in the hospitality biz, in my 31st year now, did a classical apprenticeship in Europe and have worked in 3 continents,and have owned my own businesses since 1997. So, like Mr. Mc Adams, I see a problem, and I try to deal with problems to avoid bigger ones in the future. Many others do too.

Of course, we can always deny that the current state of tipping in N. America is wrong. Mind you, nation's economies are always changing, and a nation can, literally, wake up to a recession that happened overnight. That might change a few people's minds on this issue.

[Dave Hatfield]

I would have to guess that the price of meals is higher if there's no tipping and the restaurateur has to pay the wait staff more per hour. The question is; is the combined total larger of smaller than a meal + tip situation.

I don't know the answer. In a perfect world the total would be the same or less. All I can give are examples, but again how relevant are they from country to country?

Yesterday we had lunch at a nice local restaurant. The fixed price lunch (2 courses plus cheese & dessert) was 14.50€ ($19.00) This was for the meal and included service. This would be roughly $ 16.00 in the US before tipping, but including taxes. Hard to say whether this is more or less than a place where service is 'optional'.

Excellent meal by the way!

[Dave Hatfield]

On another aspect of this discussion the economics involved with wait staff.

With tipping it is the customer who primarily determines the value of the wait person. (Assuming that the salary is a much lower portion of their total compensation.) They do this via the size of their tips.

With no tipping the salary of the wait staff is determined by the market. Offer too low a wage & you'll get no applicants for your job. Offer a higher wage & you'll get more applicants. Offer a very high wage and you'll attract the very best wait staff. ECON 101. Obviously, as an owner I want wait staff that do a good job, but I don't want to pay over the odds.

Letting the customer decide the value/quality of wait staff by the amount they tip is an acceptable method of determining compensation, BUT breaks down in a culture where 15% is EXPECTED regardless of the quality of the job done. This is the current situation in the USA.

In the no tipping situation the owner can pretty quickly evaluate the quality of a wait person and act accordingly. That is fire the bad ones and raise the salary of the good ones.

As a customer I'd much prefer that the restaurant owner pay them wait staff adequately, have that cost included to the price of my meal and be able to know the total cost of my meal up front.

[sigma]

The value of the waitstaff is still determined by the market, in this case there are just more individual bids than in the case where the owner is paying. There is still a clear market rate for service jobs, whatever the base is plus a percentage of the average check, but with tipping the buyer is allowed a discount for a worse than expected product. In many ways what it does is turn the waiter into somebody who controls capital rather than somebody who works for a wage. The capital is their skill, and they are able to earn higher returns on it by deploying it more skillfully, which is impossible in a tipless society.

[Edward J]

MMMMmmm

Most trades and professions base salaries on qualifications achieved and experience, along with other factors.

Waiters have no qualifications, no attempt has been made to create any.

Comments?

[ScoopKW]

Comments?

Sure -- how exactly do you expect this to change? It would be GREAT to have the kind of apprenticeship programs they have in Europe. But do you seriously think ANYTHING is going to change here? Not when for-profit "universities" can fleece the unknowing out of so much money. (I have co-workers with high five-figure debt. At least cooks in Las Vegas make around $40K.) You may as well post about how you're against mass murders. Opinion won't change the crazy gun culture we have in this country.

And opinion isn't going to change the tipping culture we have here. Our government isn't going to fix our broken minimum wage laws. Hell, we're never even going to get decent healthcare in this country.

And quite frankly, it's unsettling to see people from Canada and Europe -- who have the kind of health care that I can only dream of -- tell me that they don't want to tip my friends in the front of the house because of the "unfair system." How about a little empathy for the people making $2.50 an hour with no benefits whatsoever?

Or, if someone is so high up the ivory tower that he or she cannot abide leaving a tip, then voice displeasure by not eating at any restaurants that have waitstaff. Or don't visit this country in the first place. There are plenty of places that do things the way you want them done. Spend your hard-earned vacation Euro or dollar there.

[mkayahara]

And quite frankly, it's unsettling to see people from Canada and Europe -- who have the kind of health care that I can only dream of -- tell me that they don't want to tip my friends in the front of the house because of the "unfair system." How about a little empathy for the people making $2.50 an hour with no benefits whatsoever?

I'm not sure if I'm reading you properly, but it's worth pointing out that Canada has the same tipping culture as the US. I don't object to leaving tips, since it is the way the system works currently, but I don't think there's anything wrong with questioning whether the system could be made to work better.

[ScoopKW]

Canada has the same tipping culture as the US? News to me. Canadians are just about the worst tippers on earth. Ask any server in any tourist town in the US.

[annabelle]

Oy, Skoop. Now you're asking for it.

[Edward J]

Comments?

Sure -- how exactly do you expect this to change? It would be GREAT to have the kind of apprenticeship programs they have in Europe. But do you seriously think ANYTHING is going to change here?

Fair question. What if I told you that there is a professional body whose mandate it is to represent hospitality workers?

You'd never guess it, but it is the Unions

Hold on a sec, I hate them as much as you or anyone who has worked for longer than a month, but listen for a second.

Basically there are two ways to make an employer pay more:

-Put a gun to his head and say "or else!"

-Or establish a set of ascending qualifications for employees and base a pay rate on this.

The second scenerio is why you and I pay $90/hr for a HVAC guy to repair our A/C or commercial refrigeration, plus a "truck fee", plus parts and taxes. It's why we pay $80/hr for plumbers, and no one will go lower, not even the one guy business in a '76 Econo-van will charge less. Granted, you could get Uncle Fred to install your hot water heater, or install your new oven, but if an accident ever happened and the insurance co. found out a non-licensed contractor installed or fixed something, you'd not only be s.o.l. but also open to lawsuits.

But the hospitality unions? To their credit they have done nothing, no qualifications for cooks, waiters, or bakers. It's why the hospitality workers are some of the lowest paid people, why culinary schools get away with murder--they have no standards to base their curriculae on.

Canada has one luxury, we do have a qualification for cooks, the "Red Seal". Almost every Province has taken this qualification and built on to it and improved it, it 's what the culinary schools base their curriculum on. Here in B.C. we took the Red Seal and split it up into three chunks: Cook I for newbies, with an educational portion of 3 mths, then a "working zone " of a minimum of 9 mths before the cook can apply for Cook II, another "working zone", and then Cook III after which the cook can write his exam and do his/her practical and finally, the qualification. Any culinary school that wants to tap into this has design their curriculum to meet the I,II, and II segments. It took a looong time to get this in order, but it is in place and it is working very well.

Put some fire under the Union's butts, they are garnisheeing paychecks bi-weekly and have nothing to show for it.

About Canuck tipping?

It's nice that you stereo-type an entire nation, and I'd be happy to reciprocate--there is ample anecdotal material, but seriously, if you want to learn about Canadian tipping habits, I suggest you talk to a few Canadian servers in Canada--the majority of their customers are Canadian, so they know best. Oh, and I'd stay away from tourist towns. Rooms division mngrs and Bosses have a peculiar habit of cutting deals with tour operators where "tipping is all taken care of" but "forget" to tell service staff. Seriously, the tipping here is around 10-15% for white-tablecloth restaurants. Minimum wage ranges from $8.75 to $10.00 here in B.C. with national health coverage. Oh, and the exchange rate for US-CDN is 1:1--has been for quite a few years now.

[PSmith]

My experience of the catering sector comes from the lower end of the industry - working in a pub doing a bit of everything where the tips were put in a central pot and then distributed evenly amoung the staff every week.

I am pretty sure that the average diner will assume that any tips they give to waiting staff WILL be shared with the kitchen staff and might be a bit disappointed to discover that in some cases 100% goes to the servers.